Comments on: Don’t Get Too Lazy When Investing In Your Retirement Account

By: Udayan Chattopadhyay

Udayan Chattopadhyay — Wed, 25 May 2011 13:15:15 +0000

As a matter of fact, active portfolio management is a full-time job, something I plan on doing after retirement because it is such a rush!

As of now, due to my incredibly busy schedule I have a plan with my target portfolios and am planning to stick with it.

By: DIY Investor

DIY Investor — Sun, 01 Aug 2010 12:05:22 +0000

Your post should be headed “Read This and Save Yourself $000s!”. Wall Street thrives on presenting investing as a complicated process. People are finding that they have too little to retire on because a huge chunk of their nest egg has gone to the brokerage community. People still hand over their life savings to brokers who then put them into actively traded funds. In the process, in excess of 3% goes from what would be in the retirees nest egg to the over paid “advisor”.
Unfortunately this message is not easy to get across. I’m glad you pointed out that it doesn’t take much time. People are convinced that you need to put a lot of time, effort, and resources to manage assets properly. That used to be true but is no longer.
I have to say that my sense is that the movement to well diversified, low cost indexed etfs is growing.

By: IntelligentSpeculator

IntelligentSpeculator — Mon, 26 Jul 2010 16:42:09 +0000

@Mike – Thanks for the opportunity really! And good points about target date funds, I really am not a fan.

@Roger – Interesting! Where can we access that tool?

By: Roger Wohlner

Roger Wohlner — Mon, 26 Jul 2010 16:35:55 +0000

Excellent post. ETFs do provide great opportunities to build a simple low cost portfolio. They (along with index mutual funds) comprise over half of the client money on which I provide advice accross individual and institutional clients.

Mike I couldn’t agree more with your suggestion to ignore the date on the Target Date Fund and look at the underlying portfolio. Case in point, JP Morgan has a tool that looks at the allocation of over 40 2010 TDFs. The equity allocation ranges from about 20% to about 75%, a huge disparity in my opinion and very deceiving to potential investors.

By: Mike Piper

Mike Piper — Mon, 26 Jul 2010 11:49:10 +0000

Thanks for linking to my posts!

As much as I’m a fan of “lazy” portfolios, I’d absolutely agree that the first step needs to be tailoring the portfolio’s suggested allocation to fit your needs.

And while I like target date funds, I think the advice commonly given on the Bogleheads forum is sound: Ignore the date in the name and choose based on your personal needs. Just because you’re planning to retire in, say, 2030, doesn’t necessary mean the 2030 fund is going to be the best fit for you.